Online cab service Uber seems to be in more trouble: Indian service tax authorities have sought information from Uber's Indian subsidiary over the non-payment of service taxes, reports The Economic Times. It cites a service tax department official who says Uber is liable to pay service tax to the government since it is delivering a taxable service. Remember that taxi services are currently not in the "negative list" for service tax and hence attract a tax of 12.36%. The official added that other cab service providers also pay service tax and therefore they do not see the reason why Uber shouldn't do so. It's worth noting that Uber doesn't own these taxis or employ drivers on its own, rather it ties up with taxi fleets or cab owners to offer its service. Also, service tax is applicable only if the turnover is over Rs 10 lakh and individual taxi drivers many not attract tax if their turnover is lesser than than this limit. However, in this case, ET states that the tax authorities are taking the combined turnover into account. Operating through Dutch-based entity? The report also notes that while Uber has an Indian entity called Uber India Systems, it still operates in the country through a Dutch-based entity Uber BV. This is possibly being done to save taxes and also circumvent the mandated two-stage credit card authentication by routing their transactions through foreign payment gateways, since I've noticed that the merchant name for Uber transactions in my credit card statement has been "Uber BV Vorden NL". This sidestepping of…
